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Federal Reserve Chair Janet Yellen holds a news conference following day two of the Federal Open Market Committee (FOMC) meeting in Washington, U.S., December 14, 2016 (GARY CAMERON/REUTERS)
Federal Reserve Chair Janet Yellen holds a news conference following day two of the Federal Open Market Committee (FOMC) meeting in Washington, U.S., December 14, 2016 (GARY CAMERON/REUTERS)

In hiking rates, Fed keeps one eye on economy, one on Trump Add to ...

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The Federal Reserve raised official U.S. interest rates for the first time in a year and signalled an accelerated pace of further rate increases, in a repositioning of monetary policy that has one eye on a growing economy and another squarely on the incoming Donald Trump presidency.

In its final interest-rate decision of the year, the U.S. central bank raised its official policy rate, the federal funds rate, by one-quarter of a percentage point, to a range of 0.5 to 0.75 per cent. The long-awaited follow-up to last December’s quarter-point increase was near-universally expected by financial markets, reflecting the continuing strong growth in the U.S. labour market, a rebound in economic growth in the second half of this year, and rising inflation indicators. In her press conference after the rate announcement, Fed chair Janet Yellen called the rate hike “a vote of confidence in the economy.”

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